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Article Artículo

Haiti

Latin America and the Caribbean

World

On Campaign Trail, Martelly Pledges to Restore Disbanded Military Force

After launching the electoral campaign of his political party, Parti Haïtien Tèt Kale (PHTK), in Cap-Haitien last week, Martelly has renewed his 2011 campaign pledge to restore the Armed Forces of Haiti (FAd’H), reports Le Nouvelliste. In a rally held in the Palmes region in the Southeast department over the weekend, Martelly stated that his previous pledge was not false. He added that since his mandate began, “I have been around the world to meet with representatives of major countries on the issue.”

In February 2014, Martelly formally requested technical advice on the creation of a military from the Washington D.C.-based Inter-American Defense Board (IADB), a body of the Organization of American States.  Former President Jean-Bertrand Aristide disbanded the military in 1995 as the force was involved in numerous human rights violations and coup d’etats. Nevertheless, on June 25, 2015, the IADB met with Haitian authorities in Port-au-Prince to officially present a “white paper” outlining the formation of a new defense force. The process has been led by Haitian Minister of Defense Renauld Lener, himself a former major in the FAd’H.

The Director General of the IADB, Vice Admiral Bento Costa Lima Leite de Albuquerque Junior, in announcing the finalization of the “white paper” told the audience:

The principle innovation of the Haitian White Paper, with respect to others, is that it covers the global interests of security, without limiting exclusively to questions of defense. It defines the strategic guidelines of security and national defense that give answers to “all the risks and threats that could make the life of the nation vulnerable” and the interweaving with the economic development and social sustainability of the country. The field of national security includes defense policies, but doesn’t limit itself to it. Other policies, like the exterior policies and the economic policies, also contribute directly to national security.

Therefore, we understand that the Haitian White Paper of also [sic] defines a concrete space of international cooperation in the future, to the extent that the document ordered, systematized and establishes axes and sets areas of priorities for the country.

When Martelly first came to office pledging to restore the Haitian military, the plan was met with fierce resistance, both within and outside of Haiti, with key donor governments including the U.S. opposed to the idea. Reed Brody of Human Rights Watch told the Associated Press in 2011: “The Haitian army has basically been an army that's been used against the Haitian people … It was there as an instrument of repression, so it's hard to see what Haiti gains by bringing back the army.”

Jake Johnston / July 21, 2015

Article Artículo

Economic Growth

Workers

CBO’s Estimates of Output Gap, Natural Rate of Unemployment Show Discrepancy

Last quarter the civilian unemployment rate fell to 5.41 percent, the lowest rate since the second quarter of 2008. This represented a drop of 0.16 percentage points from the first quarter, when unemployment was 5.57 percent.

According to the Congressional Budget Office (CBO), this also meant that the economy nearly achieved full employment. The CBO estimates that the natural rate of unemployment, an estimate of the unemployment rate that excludes cyclical effects, was 5.38 percent in the second quarter. (The CBO publishes a short-term as well as a long-term rate; both were 5.38 percent in the second quarter. The two rates are expected to be the same going forward.)

The CBO’s estimates of the natural rate of unemployment are inconsistent with its estimates of the output gap. The output gap measures the difference between GDP and what GDP could be if there were no cyclical weakness in the economy. There should therefore be no output gap when the economy has hit its natural rate of unemployment.

CEPR and / July 21, 2015

Article Artículo

United States

Workers

The Tipped Minimum Wage Hasn’t Risen Since 1991

In April 1991, the federal minimum wage was raised from $3.80 to $4.25 per hour. The federal tipped minimum wage, which had traditionally been set to half the normal minimum wage, was raised to $2.13. The tipped minimum wage sets a wage floor for all workers who receive tips as part of their compensation; most of these workers are in the food service industry, which employs 60 percent of the nation’s tipped workers.

CEPR and / July 17, 2015

Article Artículo

Economic Growth

Globalization and Trade

IMF

Paper from IMF Shows That Recovery Is Far from Complete

Researchers at the International Monetary Fund (IMF) released a paper earlier this year on the decrease in labor force participation since 2007. They conclude that although structural components have played a role in the decline, there is a large cyclical component present as well, meaning that labor force participation can still recover significantly without risking accelerating inflation. While we can quibble with some of their exact numbers—they argue that up to 43 percent of the drop in participation rates between 2007 and 2013 can be attributed to cyclical effects, while I’d argue that it’s a bit higher—their more general findings are surely correct.

CEPR and / July 16, 2015